Details

The role of the company secretary

04 Oct 2018

All public companies are obliged to have a company secretary. In April 2008, as a result of the Companies Act 2006, the post became optional for private companies unless their articles of association explicitly require them to have one.

The information below offers a brief overview of the role; however the IoD also offers a course on Role of the Company Secretary -this practical course will equip you with the essential knowledge and skill-set to fulfil your role successfully.

Appointment

When a company secretary is appointed, Companies House must be notified together with any change of details or the termination of the appointment.

Qualifications

In a public company, the directors must make sure, as far as is reasonably possible, that the secretary has "the requisite knowledge and experience to discharge the functions of secretary of the company". In addition, they must meet one or more of the following qualifications:

Be a member of any of the following bodies:

the Institute of Chartered Accountants in England and Wales

the Institute of Chartered Accountants of Scotland

Association of Chartered Certified Accountants

the Institute of Chartered Accountants in Ireland

the Institute of Chartered Secretaries and Administrators

the Chartered Institute of Management Accountants

or the Chartered Institute of Public Finance and Accounting

Have held the office of company secretary of a public company for at least 3 out of the 5 years immediately before their appointment as secretary

Be a barrister, advocate or solicitor called or admitted in any part of the UK

Be a person who by virtue of their holding or having held any other position or their being a member of any other body, appears to the directors to be capable of discharging the functions of the secretary of the company. (Companies Act 2006, s.273)

Secretaries of private companies (where they continue) are not required to have any particular qualifications or experience.

Formal duties

According to the July 2018 UK Corporate Governance Code, "All directors should have access to the advice of the company secretary, who is responsible for advising the board on all governance matters. Both the appointment and removal of the company secretary should be a matter for the whole board."

The secretary is an officer of the company and their duties can be wide ranging. While the Companies Act does not generally specify the role of the company secretary, they usually undertake the following duties:

Maintaining the company’s statutory books, including:

a register of present and past directors and secretaries

a register of all shareholders, past and present and their shareholdings

a register of any charges on the company’s assets

minutes of general meetings and board meetings

a register of the debenture holders (typically banks)

Filingannual returns at Companies House. Other documents which must be filed include the directors’ report and auditors’ report (unless the company is exempt), and financial statements, including details of the company’s assets and liabilities.

Arranging meetings of the directors and the shareholders. This responsibility will involve the issue of proper notices of meetings, preparation of agenda, circulation of relevant papers and taking and producing minutes to record the business transacted at the meetings and the decisions taken.

Informing Companies House of any significant changes in the company’s structure or management, for example the appointment or resignation of directors.

Establishing and maintaining the company’s registered office as the address for any formal communications. Ensuring that all the company’s business stationery carries its name, registered number, country of registration and registered address. These details must also appear on the company website, emails, order forms and invoices.

Ensuring the security of the company’s legal documents, including for example, the certificate of incorporation and memorandum and articles of association.

Deciding on the company’s policy for the filing and retention of documents.

Advising directors on their duties, and ensuring that they comply with corporate legislation and the articles of association of the company.

Additional Duties

The company secretary will often be required to take on a variety of additional administrative duties. Typically, these may include:

Insurance

Company pension scheme

Administration of share schemes

PAYE & payroll

VAT registration

Management of the company’s premises and facilities

Office management

Compliance with data protection and health and safety requirements

Intellectual property

For public companies the company secretary will also be responsible for compliance with the requirements of the Stock Exchange, management of the company’s registrars and compliance with the UK Corporate Governance Code.

How important is the role?

The Cadbury Report (1993) stressed the importance of the role of the company secretary:

‘‘The company secretary has a key role to play in ensuring that board procedures are both followed and regularly reviewed. The chairman and the board will look to the company secretary for guidance on what their responsibilities are under the rules and regulations to which they are subject and on how these responsibilities should be discharged. All directors should have access to the advice and services of the company secretary and should recognise that the chairman is entitled to strong support from the company secretary in ensuring the effective functioning of the board.’’

With the increasing focus in recent years on corporate governance, the role of the company secretary has grown in importance. In many ways, the secretary is now seen as the guardian of the company’s proper compliance with both the law and best practice.